MICA (P) 190/11/2008

Issue No: 0901

www.wp.sg

$2.00

By Sylvia Lim
As a law student in the 1980’s, I was imbued with idealism and a pretty strong sense of justice and how governments should behave in a liberal democracy. I lapped up what my lecturers taught. But before I could even complete my law degree, I discovered that Singapore was not made in the image and likeness of Western democracies. In 1986, the government decided that it was not happy with the way the Law Society had conducted itself i.e. having Francis Seow as its President, and actively campaigning against restrictions on the foreign press. So it decided to amend the Legal Profession Act to place conditions on who could run for office in the Society. Select Committee proceedings were held and televised. One by one, the lawyers in the Law Society Council were grilled on national television about how they were not fit to hold office. One was even quizzed about her connections with the Workers’ Party. Detentions under the Internal Security Act of alleged Marxist conspirators followed soon after. Exactly what did the rule of law mean in Singapore? As a young law student, I was perplexed, and in need of answers. At about the same time, Joshua Benjamin Jeyaretnam, or JBJ as we know him, was fighting huge personal battles. He was the incumbent MP in Anson constituency, having won the by-election in 1981 and been re-elected in 1984. News “It was 15 minutes to 8am on 30 September 2008 when I received an SMS from a fellow WP member. “JBJ had just passed away” was the message. I stood rooted to the ground staring at the SMS. It was like yesterday that I shook his hands at the inauguration dinner of ‘The Reform Party’. After about a minute or so, I composed myself and tried to verify the news. I hurriedly rushed towards the radio and tuned into the news at 8am. True enough, Mr JB Jeyaretnam had passed away because of a heart failure that morning. He was the first opposition party candidate to be elected a Member of Parliament in Singapore, 16 years after the country gained independence. He was the leader of the Workers’ Party from 1972 to 2000. Being a political party that has been around for 50 years, we have members who joined the party from as early as 1959 and are still in the party today.” - Lilian Lee, CEC Member, age :30

broke about him being convicted of an offence involving a donor’s cheque to him; he was seen clutching his Bible as he entered Queenstown Remand Prison to serve a prison sentence. Consequently, JBJ was also disqualified from law practice. He appealed against his disqualification to the Privy Council in London, our highest appeal court then. In the course of their judgment, the Law Lords in London observed that JBJ’s conviction was wrong and that he had suffered a “grievous injustice”. This was basically brushed aside by the authorities. JBJ’s disqualification from law practice and from standing for elections for 5 years remained. Within a few months, the government abolished legal appeals to London in disciplinary cases involving lawyers, specifically citing JBJ’s appeal! Nearly 10 years later, campaigning began for the General Elections held in Jan 1997. Tang Liang Hong had teamed up with JBJ to contest Cheng San GRC. The atmosphere was meteoric, with the ruling party marshalling its full arsenal to label Tang a Chinese chauvinist. As I think back now, Tang’s shouts of “Merdeka” at a lunch time rally at UOB Plaza still ring in my ears to this day. So high, it seems, were the stakes at GE 1997. On New Year’s Day 1997, on the eve of Polling Day, JBJ stood at the WP rally stage at Yio Chu Kang stadium and said that he had with him Tang’s police reports against “Goh Chok Tong and his people”. For that statement, 8 legal suits were commenced in the High Court against JBJ. Deeply troubled and upset, I wrote to JBJ enclosing a donation. Thus we became friends.

Occasionally, I visited him in his law office. As he was representing Tang in legal suits as well, JBJ’s office was full of piles and piles of legal documents and affidavits filed. It is not an exaggeration to say that one had to tip toe through the piles in order to move around. JBJ would be busy drafting replies with the help of his lone secretary, Mrs Chiu. It gave the David and Goliath story new meaning. As the months passed, JBJ had to pay all sorts of damages, or face bankruptcy. In early 1999, I remember receiving a work bonus. With all my heart, I gave it to him, hoping it would somehow forestall what was to befall him. I know of many others who made contributions. Indeed, JBJ seemed to be regularly saddled with big amounts to pay, at one point about half a million. What were our contributions in the deep pit of defamation damages? Around that time, 3 polytechnic lecturers decided to make a short film on JBJ, to be aired at a local film festival. JBJ invited me to lunch with him and then to go to the launch of the film. When we arrived at the launch venue,

“Growing up in Anson, I owe my political awakening to the Late Mr Jeyaretnam. It still is hard to accept my ex MPś passing. Many in Anson will remember him as an MP who listened and cared, an MP who got the overhead bridge overlooking the old Zhangde Primary School built. While Anson under him may not have the best facilities, it was a place filled with hope. The affection and support Anson residents had for him is evidenced by the spontaneity of the hundreds of residents, e.g. those from Blocks 136, 137, 138, 141, and 142 who volunteered their services to his reelection campaign in 1984. While Mr JBJ did not live to see his vision of a more caring, progressive, egalitarian, inclusive, tolerant, transparent and accountable Singapore where the rule of good law reigns supreme – he was one who was ahead of his time - being realised, his efforts have not been in vain. We will do our best to realise this vision. While we recognise that this will be a struggle fraught with difficult challenges I know with a politically more aware people and their support, we will one day succeed.” - Shaun Lee, Member, age: 36.

“I joined the party in 1982 but only became more active in 1989 after I got to know more members from the party. We participated actively in the sale of our newsletter. In 1993, JBJ approached me to help sell his book titled ‘Make it Right for Singapore’. Without hesitation, I agreed and from then we never failed to make an appearance around town areas such as Raffles Place, Arcade and City Hall. Our sales hours were from 10.30am to 1.00pm and 5.00pm-8.00pm, Monday to Thursday. My most memorable sale was in Tekka, where we garnered a lot of support from the Indians. It was a common sight to see people paying us $50 or $100 for a book that costs $15. JBJ will handle the English and Tamil speaking public while I communicated with the Chinese, dialect and Malay speaking supporters.” - Steven Teo, Member, age 50.

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“As a little boy, I remember Mr Jeyaretnam as one of the prominent opposition leaders in the 70’s and 80’s, along with Dr Lee Siew Chow, Seow Khee Leng, and even Harbans Singh. Long after all the others had “disappeared” from the scene, however, JBJ was still fighting for his cause. When results for Anson were announced on TV in 1981, I remember hearing shouts and clapping around my neighbourhood. I had wondered why, but I knew it must have been something happy and momentous.” - Hougang Boy we discovered to our surprise that the film had been delisted from the programme, because it had not been passed by the Board of Film Censors. The lecturers were not at the launch, and JBJ told me he could not contact them for many days. Later, there were reports that they were being investigated for an offence under an obscure section of the Films Act. That section continues to haunt Singaporeans today, but probably not for much longer, as the People’s Action Party has indicated that they have already made political films videos about themselves which they will be showing once the law is amended! Around the year 2000, I invited JBJ to a small birthday party at my family home. Several friends and my family were there. As with most of my family occasions, alcohol was always available for merry-making. Though JBJ was a whiskey man, he whispered to me that as it was Holy Week (in the Christian calendar, the days preceding Good Friday), he did not “mean to be sanctimonious” but would not want to drink. As I recall, a clergyman among my

“When Mr J. B. Jeyaretnam passed away, he had dreams he desired and waited to be fulfilled. At 82, he had just been discharged from bankruptcy and had his legal practice reinstated. After being barred from contesting elections for more than ten years, he readied himself for what was possibly his last election only about three years away. But no matter what, he has already accomplished a lot more than what he had set out to do and what he had yet to complete.” - Melvin Tan, Member, age: 34. friends assured him that his salvation would not hinge on that evening alone…and thus was he persuaded. After he became a bankrupt in 2001, he resigned from the Workers’ Party. I joined the Party in Nov 2001 when Mr Low Thia Khiang was Secretary-General. Because of this, I believe JBJ was not happy with me and we thus became somewhat estranged. In the last few years, our dealings were minimal and formal. But when he started the Reform Party, the Workers’ Party leadership turned up in force at the Reform Party’s inaugural dinner in July 2008. Despite whatever differences, we could not forget his contributions to the continuity of the Party and his leadership through various crises. I could not say that I knew JBJ well. But from what I knew, he was a God-fearing man who stuck to his guns and moved many by the deep sacrifices he made for the sake of his beliefs. Did he pay too high a price? If he were alive, I believe his answer would have been an emphatic: “No!”

By Lilian Lee
In the article “PM Lee says two-party political model cannot work in Singapore”. (http://www. channelnewsasia.com/ stories/singaporelocalnews/view/390235/1/.html), published on the Channel NewsAsia website, PM Lee Hsien Loong said, "The country is much better off with one dominant party, as long as the PAP provides clean and good government, and the lives of Singaporeans improve." It is true, the country will be in good and safe hands as long as PAP provides a clean and good government. But having another political party in parliament would provide the much needed checks and balances for the PAP government. This alternative party will keep the government on their toes to make sure that the PAP remains clean and efficient. It is an insurance against failure. Without an opposition party, complacency will set in and it could be too late to turn back the clock. Having an alternative political party is akin to investing your money for the future – for your retirement, for your kids, and your grandkids. When we plan to grow our money, for instance, we diversify our risks; we invest our money in various areas, such as fixed deposits, equities, and government bonds. This is done because we understand the meaning of, ‘Don’t put all your eggs into one basket’. Likewise when it comes to governing a country, we should not rely on only one political party. Allow me to illustrate why, by using the same analogy of investing for the future 1) You can’t plan your future in the future; you got to plan it now. No one plans their future in the future because it’s impossible! Being the government of Singapore, it is the PAP’s duty to ensure that the future of Singapore is taken care of. Should the PAP fail, does PM Lee expect any political party to just spring up and take over the governance of Singapore? There will be NO time for any good alternative party to take over because one such party will need years to build up its credibility. PM Lee had said: "If the party doesn't work, if something goes wrong with the party, you can be sure new parties will come, new contests will come. People will spring up to take on the government in no time at all." The truth is, if any party were to spring up from nowhere and start governing, Singapore will be in even great danger.

“JBJ赢得Anson时， 因为我的眼睛受了伤所以无法到现场感受当时的气氛， 是我最大的遗憾。 虽然有些时 候我不认同他的作风， 他的精神可是令我非常的敬佩。 尤其是那份， 为国为民从来不要求回报的真诚。 ” - Lim Ee Ping, Member, age: 72. “The most memorable experience that I had with him was the celebration after the win in Anson. People from all walks of life came to congratulate him. I will never forget a particular supporter, a journalist from London. Mr JBJ had come across to me as a man who was very hardworking and persistent.” - Marsh Edmund Richard, Member, age: 66. “I was so happy when Mr JBJ won the seat in Anson. It was all over The Straits Times. I was happy not just for him but for the whole constituency as well as the party. The public, residents from Anson and of course members from the party were helping out during the elections. It was not just JBJ’s win; it was everyone’s win!” - Sakthivel, j, Member, age 59.

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In other words, you have to get it when you don't want it, so that you have it when you need it. 2) You can say “I don't need it”, but can you say “your family won't need it”? PM Lee can say he doesn’t need a 2-political party system, but can he say the same thing for Singaporeans? During the General Elections in 2006, at least 33.4% of Singaporeans who were eligible and had the chance to vote, expressed in their votes that they NEED an alternative party. 3) No person ever dies at the “right time” Should the PAP fail, it may happen at the worst time, for example, during a severe recession. Like death, it is almost uncertain to predict when it will happen. Therefore, we need an alternative party that is able to take over anytime. So it is not wise to say, “I want an alternative party in the government, but now is not the right time.” The truth is, there is no such thing as a “right time”, because we will never know when is that right time until it is too late. 4) Don’t leave it to chance Are we, Singaporeans, going to leave it to chance? The chance of the PAP failing and to have any political party to spring up to take over our country? Shouldn’t we be having the alternative party OW so that we can choose and decide which is the best one? 5) Doing nothing may be the worst thing to do Sometimes the biggest price that you pay in the world is doing nothing. And that could be the worst thing that you do. If we want change or expect change for the better, then we have to do something. If there is any alternative party that aspires to bring about positive changes, that party will have to start doing the work now. That party has to start playing an alternative role in parliament now. Conclusion In conclusion, the government encourages all Singaporeans to plan for the future, to ensure that one has enough funds to tide us through our retirement until the day we die. In Singapore, the CPF scheme is itself a form of investment in our future; it ensures that we have enough funds on which to live after we retire. The new compulsory CPF Life scheme which will kick in by 2013, is another example. Our government plans ahead. But when it comes to the need for an alternative party, the government does NOT plan ahead. Regardless of how formidable the PAP might be, it will still need another political party because even the Titanic which was supposed to be unsinkable, has life boats and life buoys on board. Incidentally, the Titanic sank in 1912, killing more than 1,500 people.

By Joseph Teo
In an article in The Sunday Times on 2 Nov 20081 , the Minister for Health Mr Khaw Boon Wan announced that he planned to amend the Human Organ Transplant Act to allow people who donate their kidneys to get monetary compensation from the recipient or a voluntary organisation. He said that “the World Health Organisation and countries such as the United States believe that it is ethical to compensate donors so they do not suffer for their act of altruism.” He hinted that the sum would be “at least five figures, possibly six”. However, such an approach and argument is flawed on three counts: True altruism is priceless First, altruism is “the act of caring about the needs and happiness of other people more than your own”2. Such acts are considered noble and worthy of admiration precisely because there is no material benefit for their self-sacrifice. Such people and such acts are valued because they encourage the suppression of individual need for the good of others and for the good of the greater community. The greater the capacity of a society to do this, the better it is able to survive difficult times. The act of compensating donors for kidneys removes the altruistic component from the act, and makes it a commercial transaction. By allowing compensation, we are saying that as a society, we do not really value altruistic acts, and that with money and power, all things, including the denial of death, is possible. This will encourage individualism, and a “me first” mentality found in some other countries. This cannot possibly be good for us as a nation. The poor will be disadvantaged Second, organ trading will exacerbate the rich-poor divide. In an environment where all prospective organ recipients are in a queue regardless of whether they are rich or poor, the lives of both rich and poor are valued equally. Legalising organ trading creates an environment where those who can afford it “bypass the queue” – meaning there will be preferential treatment of one group over another. Lower or even middle-class Singaporeans are unlikely to be able to afford sums that are five or six figures. The argument that “the National Kidney Foundation could step in to help” does not work in a situation where there are two prospective recipients with hard-to-match donor requirements competing for a single kidney. Would the wealthy recipient outbid the National Kidney Foundation? And would a poor or middle-class Singaporean die because he wasn’t rich enough to afford a kidney? In the National Longevity Insurance Committee (NLIC) Report3, Professor Lim Pin noted that there were public concerns that “the scheme benefits those who are wealthier as they will live longer”. However, the NLIC noted that “there is as yet no robust local data to support the use of any other factor (apart from age and gender) to price the premiums”. The NLIC Report is silent on whether such robust data exists in other countries, and did not propose that we try to obtain such robust data before making a key policy decision. Why? Will legalising organ trading allow the rich to live longer? Will it create a situation where the poor and middle class end up subsidising the rich when the National Lifelong Income Scheme kicks in? No incentive to search for alternatives Third, legalising organ trading retards the search for alternatives. By making it possible to easily harvest organs from the poor, we reduce the incentive and desire to create fully artificial organs such as the Jarvik 2000 artificial heart4, for instance. Is legalising organ trading the best way to control it? While it is true that banning organ trading in Singapore may encourage some to go overseas to obtain what they cannot obtain legally in Singapore anyway, it is not sufficient reason to make it legal here. If it were so, then we should not ban sexual relations between men and underaged girls in Singapore, since doing so would encourage some men to go to our neighbouring countries to seek this illicit pleasure. In addition, compensating organ “donors” may encourage them to undergo significant risks to their health for the sake of money monetary returns and this may not be in their best interests – just as it is not necessarily in someone’s best interests to offer him cheap and easy credit for him to buy a house that he could not ordinarily afford. Conclusion In summary, legalising organ trading diminishes the value of altruism and encourages a “me first” mentality, divides the nation into “haves and have-nots”, and retards the search for alternatives to harvesting organs from poor people. Rich or poor, powerful or weak, smart or simple, we come into this world naked, and naked we will leave this world. Death is the great leveller. Let us come to a graceful acceptance of it, and not choose to exploit those less fortunate than us. Quick Poll Do you agree that organ trading should remain banned? Vote now at http://www.wp.sg/wordpress/?p=127

By Koh Choong Yong
For many years, Singaporeans have been given only a one-liner explanation for electricity tariff increases: “due mainly to the higher fuel costs faced by the generating companies”. Although in every press release for tariff increases, the fuel oil price used to calculate the new tariffs is quoted, not much light has been shed on the formula used to derive the tariffs. It was only after a question raised by NCMP Sylvia Lim at the Parliamentary sitting on 21 Oct 2008, asking for the full details of the formula to be published, plus her reiteration of the request in a letter to the Straits Times Forum on 30 Oct 2008, that the Energy Market Authority (EMA) finally published the formula on its website (http://www.ema. gov.sg/attachments/Consultation/20081031095353_6468_ Electricity_Tariff.pdf) on 31 Oct 2008. Senior Minister of State for Trade and Industry S. Iswaran said in the same Parliamentary sitting, “the industry is inherently complicated and the formula reflects that”. Nevertheless as this affects all of us, we should take a closer look at the released formula to attempt to make it more digestible. The big picture Before we dive into the various components in the formula as provided in the EMA document, we need to understand how electricity is produced and delivered to our houses. At the simplest level, there are 3 basic steps in this: power generation, transmission & distribution and metering, reading & billing. Electrical power is generated in power generators, which consumes different kinds of fuel, accordingly to the design of the generator. The generated power is transmitted through the power grid, from the power stations via a series of substations, and eventually distributed to households. The last step is to deploy manpower to read meters and bill consumers accordingly at the end of the month. Conceptually, these are the basic steps. However, some complications to this picture were added as the electricity market liberalises in Singapore. State-owned assets were gradually corporatised starting from 1985, resulting in three separate generation companies (gencos) competing in the market – Senoko Power, PowerSeraya and Tuas Power. Other gencos entered the market subsequently as it liberalised. The EMA was established in 2001 as the regulatory body over electricity and gas industry. The National Electricity Market of Singapore (NEMS) opened for trading on 1 Jan 2003, with Energy Market Company (EMC) acting as the exchange market for electricity trading.

So the picture today can be summarised as follows: • 8 generation companies supplying electrical power to the NEMS; • 6 retailing companies buying power from the market to be retailed to end customers, currently only “contestable” customers, which exclude households; • SP Services providing the meter reading and billing services to households, acting as the additional retailer providing power at regulated rates; • SP PowerGrid transmitting and distributing the power to homes; • EMA setting the rules; • EMC implementing the rules Pieces of the puzzle There are five components in the formula for determining the electricity tariff for households. Four of them are considered non-fuel costs, meaning that they are not affected by the volatility in fuel prices. The one component that is affected by the fuel price volatility is, no surprise, the fuel cost itself. Note that all the components are charged at x cents per kiloWatt-hour (kWh), where kWh is the standard unit of energy used in our utilities bills. Non-Fuel Costs The non-fuel costs (listed from the least amount to the most) are: • Power System Operation & Market Admin Fees • Market Support Services Fee • Grid Charge • Power Generation Cost The Power System Operation & Market Administration Fees are paid to EMA and EMC for their respective roles as the power system operator and market operator. The 0.06 cents per kWh paid for this has remained fairly constant in 2008. The Market Support Services Fee or MSS Fee is set by SP Services and regulated by EMA to recover the costs of billing and meter reading. According to the formula document, the 0.34 cents per kWh has remained flat for the past 5 years. Grid Charge is paid to SP PowerGrid for the transmission and distribution of power from the power stations to the households. SP PowerGrid is the management company of SP PowerAssets, which owns the electricity transmission and distribution networks in Singapore. This means all power generated in Singapore will have to go through SP PowerGrid's network. The Grid Charge is reviewed annually, with the latest review on 1 Oct 2008, bringing the Grid Charge from 5.35 cents per kWh to 4.92 cents per kWh. Power Generation Costs refers to the costs of operating the power stations, such as manpower and maintenance costs, as well as the capital costs of the stations. Based on the percentage stated on the graphs in the formula document, the following power generation costs are derived for the year of 2008:
Period Q1 2008 Q2 2008 Stated Percentage 22.4% 21.6% Electricity tariff 22.62 23.88 Power Generation Cost
(cents per kWh)

Q3 2008 Q4 2008

22.1% 20.5%

25.07 30.45

5.54 6.24 (provided in the document)

The formula document says that EMA reviews the power generation cost once every 24 months, with another document with further complicated details on the review process. Without getting too much into the details, it is clear that even if fuel costs were to remain constant, there are other factors at play that will cause a gradual but continuous increase in the electricity tariffs. Fuel Costs Fuel Costs make up the most significant portion of the electrical tariff, and is most controversial because of the time lag between the change in international crude oil prices vs the quoted fuel costs used in the formula. There are a few main steps in determining the fuel costs: 1. The formula starts with forward fuel oil prices. An index developed specifically for EMA by Intercontinental Exchange (ICE) known as the Singapore Fuel Oil Index is used to derive the average 3-month forward fuel oil price. The index gives us a price in terms of US$ per metric tonne of fuel. This is converted into US$ per barrel. 2. The average price is then converted from US dollars to Singapore dollars at the prevailing exchange rate (from another index), yielding a S$ per barrel price. 3. The S$ per barrel price is converted into S$ per million British Thermal Unit (mmBtu – a unit of measurement of heat energy in gas). 4. Multiply the S$ per mmBtu price by the heat rate for power plants (in Btu/kWh, reviewed by EMA every 24 months). After this series of averages and conversions, the cents per kWh value that is summed up together with the non-fuel costs to get the final electricity tariffs for the quarter is finally derived. Putting the picture together Once the components are understood, it is easy to understand how we arrived at the 30.45 cents per kWh in Q4 2008:
Component Fuel Cost Power Generation Cost Grid Charge MSS Fee Power System Operation & Market Administration Fees Total Breakdown cents per kWh 18.89 6.24 4.92 0.34 Paid to Generation Companies Generation Companies SP PowerGrid SP Services Power System Operator (EMA) Energy Market Company

0.06

30.45

Dissecting the pieces Gas or Oil The single most asked question in every debate about electricity tariff is: since almost 80% of our power

(cents per kWh)

5.07 5.16

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Hence there is nothing inherently wrong with using 3-month forward fuel oil prices as the price index, if there really is no other way to price natural gas. The problem comes when the fuel oil price index is referred to once every 3 months, in accordance to the review schedule of the regulated electricity tariff. The price for Oct 2008 to Dec 2008 was fixed based on the contract prices transacted in the month of Jul 2008. However, this also means that prices for 3-month forward fuel oil contracts transacted in Aug 2008 and Sep 2008, which should be delivered in Nov 2008 and Dec 2008, were not taken into consideration. When prices fall in Aug 2008 and Sep 2008, the fuel cost component quoted for the calculation of the tariff is still based on the prices in Jul 2008. This caused a case of over-collection. In fact, as long as the prices in the “in-between” months (Feb, Mar, May, Jun, Aug, Sep, Nov and Dec) differ from the prices in the “index” months (Jan, Apr, Jul, Oct), there will be cases of either over-collection or under-collection of the fuel cost component. In the recent times, where oil prices fall dramatically following the international financial crisis, what would be the mechanism in the formula to ensure that Singapore households are not penalised by the over-collection of the fuel cost component? Commercially Sensitive Information In the EMA document on the formula, the 3-month forward fuel oil price in Jul 2008 arrived at was S$155.14 per barrel. The next line states that at this fuel oil price, the average gas price is S$27.269/mmBtu. Leaping price per volume to price per heat energy is quite a long jump, but the explanation given to this leap was a one-liner: “EMA cannot reveal further how the gas is priced as the information is commercially sensitive.” So this is a case of revealing everything to you but omitting the most important part. Just imagine someone inviting you to watch TV at home, showing you his expensive surround sound, explaining the new OLED technology, showcasing the Blu-ray player, and tell you, “Sorry I need to cover the screen because I am afraid that it will be scratched.” In any case, if the information is commercially sensitive, it also means that the contracts between the gencos and their gas suppliers would all be different, so is the price of S$27.269/mmBtu an estimate, the average, the median or derived using other means? Regardless of which, it is telling that the fuel component portion would mean a high margin for some gencos, since not all their costs are uniform. Power Generation Costs does not reflect efficiency savings The liberalisation of Singapore's electricity industry is aimed at enhancing market efficiency. However, looking at the table for Power Generation Cost, the component has risen from 5.07 cents per kWh in Q1 2008 to 6.24 cents per kWh in Q4 2008. At the cents per kWh this might not look like a huge increase, but when the domestic consumption figures for Q1 2008 of 1,553,000 kWh and Q2 2008 of 1,776,000 kWh are taken into consideration, the increase in power generation cost is quite substantial. (Do your own multiplication to see the millions in dollars increased in power generation cost). Do such figures reflect that the gencos are operating as efficiently as possible? Maybe it will take some further explanation from EMA on what would be the power generation cost should there not be an electricity market, for us to see a better picture. Full Retail Contestability – is that the solution? All this discussion about the formula for regulated electricity tariff will be rendered obsolete once Full Retail

Contestability kicks in. Full Retail Contestability (FRC) refers to the system where every electricity consumer, including households, pays a competitive price for electricity. When FRC kicks in, buying electricity will be more similar to choosing a mobile phone package, with up to 6 different electricity retailers currently licensed to retail electricity. Although probably, as a result of the competition from the retailers, the electricity prices households pay in the initial period will be substantially lower and less prone to volatility than they are today, FRC has its own sets of pros and cons, which is outside the scope of this article. The future With the historical electricity consumption in Singapore doubling from 1987 to 1997 and a further 1.5-time jump between 1997 and 2007, the real problem is the relentless increase in demand for energy. Coupled with the finite but diminishing reserves of fossil fuels (oil, natural gas, coal etc) in the world, and the price of energy is bound to increase over the long term. The real solution is two-pronged: on a national level, Singapore should start early, that is, NOW, to develop capabilities of renewable energy sources, and really implement them instead of paying lip service to it. At the individual level, we should think twice when we are about to use some energy – can we do something to save and conserve it?

generators use natural gas as fuel, what is the rationale behind making use of an index based on fuel oil prices for our calculations? The answer provided by S Iswaran is as follows: “In the US, there is a separate and distinct market for natural gas which determines its price. In Asia, however, there is no such distinct market and the price of natural gas is indexed to the priced of fuel oil, which is the alternative fuel for power generation. .... Countries like Japan, Korea, Taiwan and Singapore buy natural gas through long-term contracts at a price which is tied to the current price of fuel oil. Therefore, when the fuel oil price increases, so too will the natural gas price with a consequential increase in our electricity tariffs.” (Singapore Parliament Hansard, 21 Oct 2008) Singapore imports pipeline gas from Malaysia and Indonesia. Various long term contracts are reported in the media, but the dollar value of the contracts have eluded most of the reports. However, one particular gas supply agreement signed between Indonesia Minister of Energy and Natural Resources Purnomo Yusgiantoro and (then) Minister of Trade and Industry George Yeo in 2001 disclosed that “The 9 billion U.S. Dollars contract is valid for a period of 20 years commencing 2003 with a provision for further extension should both parties so require.” (Xinhua News Agency, 12 Feb 2001, “Indonesia, Singapore Sign gas Sales Contract Agreement”) In the contract above, it appears that the price for natural gas was fixed at US$ 9 billion for the 20 years, so where is the tying to the current price of fuel oil? Other than the quoted contract, there must have been many other contracts between Singapore and its pipeline gas supplying countries, Malaysia and Indonesia. The details of these agreements by the Singapore government does not seem to be available to the Singapore public, leaving the question of how much does an increase in the fuel oil price really affect the costs facing the generation companies in Singapore unanswered. Time Lag, Over-collection and Under-collection In the name of providing more stability in prices, the 3-month forward fuel oil price is used, instead of spot fuel price. In layman's terms, the difference is the time at which the goods ordered is being received. For example, Company A makes an order in Jul 2008 for delivery in Oct 2008, and the contract price for this is the forward price. Company B makes an order in Oct 2008 for immediate delivery, and the contract price for this is the spot price. Both contracts are made and the price fixed. The main difference is that the 3-month forward price provides a time lag effect – whatever price we are paying for is the market price 3 months ago. In the example above, Company A pays the market price of Jul 2008 whereas Company B pays the market price of Oct 2008, both for delivery of goods in Oct 2008, but they both paid the price on their respective contracts for the goods. If a Consumer C were to purchase the goods from Company A, he will see that there he is paying for goods at the price 3 months ago.

Down 1. A wartime leader of Great Britain 2. The colour of The Workers' Party T-shirt 3. President of China 6. Current President of France 7. Ex-Iraqi Dictator and President Obama share this common name 8. Represents 'Power of The People' in The Workers' Party Logo 10. One of 9 Single Member Constituencies in Singapore 12. Won by The Workers' Party in the 1991 General Elections Across 4. The only Asian country in the Group of Eight (G-8) 5. The only American President who got elected 4 times 9. Second President of Singapore 10. Founded The Workers' party in 1957 11. Capital of Canada 13. Won by The Workers' Party in a 1981 By-Election 14. Symbolizes the 'Working Class' in The Workers' Party Logo 15. An old name for Singapore 16. The policy of 'openness' initiated by Ex-Soviet Leader, Mikhail Gorbachev

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Equal concession fares should, likewise, be accorded to both polytechnic and JC students. Then, when both JC and polytechnic students enter university, they pay a slightly higher fare. This is fair, as a university can – rightly – be considered a tertiary educational institution.

By Wilson Foo
It is phenomenon that Singaporeans have been through previously. What is it? Is it a meteor shower? Passing comets? The flight of migratory birds? None of those. I am referring to the current economic crisis. The recent collapse of several major financial institutions in the United States has precipitated a severe economic crunch in our country. First, investors were told that the financial products they had purchased were not worth anything. And more recently, companies have begun to lay off their employees. In addition, with prices of basic necessities spiralling up relentlessly, we face the unwelcome prospect of an economic catastrophe that may be even worse than the Asian financial crisis in 1997. So what is the Singapore government doing about this? The stand of the ruling party, thus far, seems to be one of apathy. When financial disaster strikes, our countrymen are told to “work harder”. We are asked to bite the bullet and ride out the storm. Yet, we see the occupiers of high office being largely unaffected, at least in terms of the quality of life. They continue to draw top-dollar salaries. The government announced on 24 Nov 2008 that the salaries of Ministers and top civil servants have been reduced by 16—19%. But the fact remains that even after this reduction, their salaries are still enormous by the standard of most Singaporeans. Many of our Ministers do not live in HDB flats nor take public transport and so they do not feel the squeeze that ordinary families feel when prices rise and jobs are lost. Lehman-linked products While measures have been taken to grant relief to certain purchasers of failed financial products linked to Lehman Brothers, these measures have been instituted by the banks which sold them; the government has not done anything besides reminding these banks to look into the matter. Many of the investors are still left in the lurch. At the same time, while it is understandable that the older and less educated are given priority, the government should still look into the possibility of granting aid to all those affected. If the ruling party claims to be world-class, then their world-class personnel ought to be able to architect a satisfactory solution to quell the wellspring of unhappiness generated. Mere sweet talk does not suffice. Retrenchment In similar vein, the government has been to tick-off DBS for retrenching about 4,000 staff in Singapore, and issue guidelines for other companies considering retrenchment. But there is no tangible assistance from the government. The government should provide incentives, in cash or kind, to companies which take active steps to avoid retrenching their employees, or at least, to minimise the number of people they have to layoff. These incentives would also help to tide the companies through the economic crisis. The Workers’ Party, on its part, will continue to press for greater protection of workers, and to urge the government to do more to help Singaporeans during this difficult period.

Currently, all full-time students in Singapore are eligible to purchase monthly concession passes for public transportation. However, full-time students from the polytechnics are treated differently vis-à-vis junior college (JC) students and students from the Institute of Technical Education (ITE).
JC & ITE students Bus Concession Pass (unlimited travel on basicfare bus services for one month) Train Concession Pass (up to 4 rides per day on the MRT/ LRT for one month Tertiary students % (polytechnics & difference universities) in prices 89%

By Bernard Chen Jiaxi

Transitlink and the Public Transport Council (PTC) should provide a more equitable transportation fare structure by treating all local polytechnic stuidents on the same basis as JC and ITE students. Since there may be working adults taking part-time diploma courses at the polytecnics as well, it would be fair to limit the fare concession to only full-time polytechnic students under a specific age of, say, 25. Private students, who currently do not enjoy any fare concession at all, should also be accorded concession fares to help defray their education expenses. Concession fares for these students could be higher than that for university students, but still lower than what the general public pays. Below is a simple recommendation for a possible revision of concessionary fare prices: Revised Concession Fare Chart
Public Universities Polytechnic – NUS, NTU, (price bandwidth SMU, SIM between 0 – 25%) (price bandwidth between 25% 40%) Bus MRT Hybrid $27.50 - $34.50 $25 - $31.25 $52.50 - $65.60 $34.50 - $38.25 $31.25 - $35 $65.60 - $73.50

Polytechnic and university students pay as much as 89% more in transportation fares than their peers in JCs and ITEs. The basis of this fare differential between polytechnic students and JC/ITE students arises because currently, polytechnic students are classified as tertiary students, whereas JC students are classified as secondary students and hence enjoy the same concession fares as their secondary school counterparts. While it is reasonable for older students studying at higher levels to pay more, the current fare structure is, however, not fair in classifying polytechnic students as “tertiary” students who should pay the same fares as their university counterparts. There is in fact no basis to differentiate polytechnic and JC students. Both groups of students have just completed their secondary school education. Both are studying full-time and will spend roughly the same time in their respective institutions (2 years in JCs and 3 years in polytechnics). And after completing their polytechnic or JC education, both groups of students may poceed to further their studies at universities. Hence, a JC and a polytechnic should be seen as equal stepping stones to the same destination – that is, a university.

The cost of public transportation has been rising continually. Many students, whose parents experience financial difficulty especially in the current economic climate, have been forced to take part-time jobs to support themselves. A student’s task is to concentrate on studying and to prepare himself or herself for the future, not to work to earn money. So the very least that publc transport operators can do is to offer more substantial concession for as many students as possible, in order to help alleviate the financial burden of students and their families. Bernard Chen, 23, is pursuing a Diploma in Leisure and Resort Management. He is currently the Secretary of the Workers’ Party Youth Wing.

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strongly that polytechnic students should not be made to pay adult fares while their junior college counterparts are paying concessionary fares. Kelvin Quee believes that Singapore’s transport system is still a far-cry from that in other first-world countries, and competition should be introduced to better serve the needs of the people. Alvinder, on the other hand proposed the idea of a one-car per household policy which he envisions can only happen when Singapore has an efficient and reliable transport system.

women. Held on 16 August 2008, YouthQuake 4 saw for the first time a panel of 4 female speakers including Dana Lam, former President of AWARE (1999 to 2000), Lilian Lee (an activist and member of the Workers’ Party Central Executive Committee), Koh Kai Lin (a graduate from the Singapore Institute of Management and Selene Cheng, an avid blogger and writer for The Online Citizen, a sociopolitical blog in Singapore). Dana, the sole mother among the panel of speakers, briefly described the women’s movement in Singapore since independence in 1965 and provided an overview of society’s perception of women. Lilian, on the other hand, highlighted the plight of unwedded mothers and questioned whether the treatment and entitlements they are receiving from the state are fair. Kai Lin touched on why Singaporean women are not keen to have more babies. She feels that, besides monetary assistance, there needs to be a change of mindset and attitude towards marriage and having children, as well as strong family support. Selene identified the different roles women are playing in society today and also identified the need to strike a work-life-balance as a challenge faced by women today. A Big THANK YOU! The Workers’ Party Youth Wing would like to thank all 13 speakers for their time and contribution, as well as the guests for their warm and encouraging response. Second series of YouthQuake The Workers’ Party Youth Wing is in the midst of preparing for the next series of YouthQuake forums. This time round, we will be taking YouthQuake to different locations around Singapore. YouthQuake (series 2) is scheduled to be held in the first quarter of 2009 and the possible topics are education and the media. We look forward to seeing you soon!

By Bernard Chen Jiaxi & Peng Jian Xiong, Aaron
YouthQuake, a series of forums organised by the Workers’ Party Youth Wing, seeks to be an effective and open platform for youths to present their ideas and opinions. It aims to educate and empower today’s youths so as to bring about positive social change. YouthQuake 1: Should Singaporeans be allowed to vote at 18? Student Anne Tan, full-time national serviceman Khairulanwar Zaini, and Choo Zheng Xi, National University of Singapore (NUS) law undergraduate and Chief Editor of The Online Citizen, a socio-political blog, kickedstarted the first of 4 YouthQuake forums on 3 May 2008. Anne, Khairulanwar and Zheng Xi touched on the social, political and constitutional implications of young Singaporeans voting at 18. At the end of the session, most of the youths present were convinced that lowering the voting age to 18 would go a long way in encouraging people to be the creators of a system they want to see. Bernard Chen, 23, Secretary of the Workers’ Party Youth Wing as well as the forum’s moderator, ended the session with this message: “Leaders whom youths can’t vote for today may send them to war tomorrow. Youths shouldn’t be held to a stricter standard than adults. Lowering the voting age should be the just and fair way to make things right.” YouthQuake 2: Transportation Road Map by Youth in Singapore YouthQuake 2, titled “Transportation Road Map by Youth in Singapore” was held on 7 June 208. The 3 speakers were: Republic Polytechnic graduate Jamilah Lim who is also a member of the Workers’ Party Youth Wing Exco, Kelvin Quee, a final year Accountancy student at NTU, and Alvinder Singh, who had recently attended the International Youth Leadership Conference in Prague, Czech Republic in July 2008. Jamilah, the only female speaker at this forum, maintained that all full-time students should be paying the same transport fares regardless of the institution they are studying in. As a polytechnic student herself, she feels

While many may agree that we have a world class transportation system, many of the youths at the forum also felt that there is still much room for improvement, and that we should strive to provide the efficient transportation service for our people. YouthQuake 3: The Environment - Has Singapore done enough? YouthQuake 3 saw a panel of environmental advocates offering their insights into the environmental situation in Singapore. Of particular concern was whether Singapore has done enough to conserve our greenery. The Workers’ Party Youth Wing was pleased to have Nathaniel Koh, an undergraduate in SMU’s Bachelor of Science (Information Systems Management) and Political Science programme; Low Ee Mien, a part-time fund manager for a private investment fund, blogger, peak-oiler, and climate change activist, and Wilson Ang, founder and President of the Environment Challenge Organisation (Singapore), also known as ECO-Singapore. Using various analogies, and anecdotes, Nathaniel listed down a few suggestions on how more people can be encouraged to go “green” and reminded Singaporeans that it is not too late to reverse the damage done to the environment. Ee Mien took the opportunity to share with the audience about the Peak Oil concept and gave a comprehensive introduction to the various considerations and alternative energy sources. The session ended with Wilson, the President of EcoSingapore, driving home the idea of responsible consumption. He emphasised that we should not go green just because it is the “in” thing to do so. He left everyone with this message, “Everyone has to know and understand exactly what we are doing and why. It is not just [about] saving the environment, but more of saving ourselves.” YouthQuake 4: The Evolving Role of women in Singapore Singapore’s history is filled with accounts of our founding fathers. But where are our founding mothers? With this in mind, the first series of YouthQuake ended with a discussion on the role of women in Singapore society, an issue that is relevant to the men and close to the hearts of

Email Bernard Chen @ bernardchen@wp.sg for more information on YouthQuake (series 2), and to offer your suggestions and feedback.

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customers understand the nature and risks of the products and have sufficient net worth to assume the risks and bear the potential losses of trading in the products.” The HKMA hotline, 8100-2314, was subsequently set up on 22 September to take calls from 9 a.m. to 6 p.m. Monday to Friday. A form for complaints in writing was also made available on the HKMA website. Only 2 press releases were issued by HKMA between 15 and 22 September on Lehman Brothers. Stage 1: Singapore’s response In contrast, the Monetary Authority of Singapore (MAS) issued 4 press releases on the failed investment products linked to Lehman Brothers in the same period. The press release on 22 September reminded Financial Institutions (FIs) to “update all affected investors as soon as information becomes available” and suggested that consumers approach the Financial Industry Disputes Resolution Centre (FIDReC) if they are not satisfied with the FI’s response. It also stressed that MAS will work with partners to enhance financial education so that investors will not “invest in products they do not fully understand.” No meeting was arranged by MAS to facilitate communication among investors, banks and trustees. No dedicated hotline for complaints was set up. Then, in a press release on 23 September 2008, MAS informed the public that it was in “close contact with the financial institutions (FIs) which sold or issued structured products linked to Lehman Brothers, and has asked them to expedite their assessments of how investors will be affected.” It also asked FIs to keep MAS “informed of customers' queries and complaints they have received and the responses provided.” Stage 2: Hong Kong’s response Meanwhile in Hong Kong, HKMA started to investigate complaints of alleged mis-selling of investment products related to Lehman Bothers. By 6 October, it had received 5,567 complaints from retails investors alleging improper selling of investment products by licensed banks. The number of complaints swelled to 12,091 by 17 October. Twenty-four cases involving “complaints of alleged misconduct in respect of investment products related to Lehman Brothers” were referred to the Securities and Futures Commission (SFC) for further action. On 17 Oct 2008, HKMA also welcomed the distributing banks’ agreement to the government’s buy-back proposal for the Lehman Minibonds. Although the Task Force had appointed an independent financial adviser to valuate the collaterals for the Lehman Minibonds, HKMA had

“in parallel appointed Price Waterhouse Coopers as an independent advisor to review the process and strategy adopted by the distributing banks in implementing the (buy-back) proposal.” By 24 October 2008, HKMA has received 16,301 complaints and has referred 64 cases to SFC. It had also formally opened investigations on 285 complaints. On 31 October, HKMA announced mediation and arbitration services for Lehman Brothers-related cases and offered to “co-ordinate referrals and pay share of the fee for these services on behalf of investors whose complaints in relation to the sale of the products have already been referred by the HKMA to the SFC’ and ‘investors whose complaint has resulted in a finding against a relevant individual or executive officer by either HKMA or the SFC.” In all, HKMA issued 7 press releases in the period of 23 Sep to 31 Oct 2008. Stage 2: Singapore’s response Back in Singapore, in the same period of time, MAS issued about 10 press releases to keep the public informed on the resolution process. On 2 October, it identified “three well-respected individuals to oversee the relevant FIs” complaints handling and resolution process’ for the failed structured products. A 751-word press release on 2 October also gave an outline of MAS’ approach in dealing with the failed structured product crisis. In it, MAS reiterated that it “will take firm and appropriate regulatory action where there are breached of law or regulations by the FIs or their representatives.” It also set a timeline for FIs to respond to investors’ complaints. On 10 October, MAS revealed that the total issue size of the Minibond programme was S$508 million with 9,750 retail investors involved. No other action or investigation into mis-selling was announced. Stage 3: Hong Kong’s response By 14 November 2008, HKMA had referred a total of 113 Lehman-Brothers-related cases to the SFC. It also formally opened investigations into thousands of complaints. Stage 3: Singapore’s response On the same day, MAS issued another press release on 2 more failed financial products called Pinnacle Notes Series 9 and 10. The issue size of the affected products was $26 million with 700 retails investors involved. Comparing the 2 cities’ responses The two contrasting styles of MAS and HKMA in handling the Lehman Brothers crisis have become a talking point among investors and netizens. Looking at the press releases of the two authorities, one can infer that HKMA is putting itself on the frontline in resolving the complaints of investors while MAS is leaning towards prodding FIs, independent parties, and investors to sort out the disputes among themselves. The measured and calculated stance taken by MAS in handling the financial debacle may not be wrong. However, it did not go down well with many anxious investors who were desperately looking for an answer or some form of leadership to resolve the crisis.

By Png Eng Huat
“It was the best of times, it was the worst of times…” so goes the famous opening line of Charles Dickens’ historical novel, A Tale of Two Cities (1859), set in the turbulent times preceding the French Revolution in London and Paris. One hundred and forty-nine years later, a new “novel” about two cities, set in the chaotic times following an unprecedented credit crisis, is about to be written. Using the similar words of Dickens, “it was the best of times for one who did not buy any minibonds, it was the worst of times for one who did”. This new story will compare the crisis response of 2 cities, Singapore and Hong Kong, in the aftermath of an unprecedented financial meltdown. The saga started in 2007 when the subprime market in the United States began to buckle under stress. The crisis worsened the following year and started a chain reaction in the financial markets causing behemoths like Bear Sterns, Washington Mutual, and Lehman Brothers to fall like dominoes. On 15 September 2008, the bankruptcy filing of Lehman Brothers Holdings Inc. sent shockwaves to thousands of investors of structured financial products linked to the 158-year old investment bank. In an instant, many of their investments were completely wiped out. Affected investors in Singapore and Hong Kong began their search for an answer to this unthinkable event. Stage 1: Hong Kong’s response Six days later on 21 September 2008, the Hong Kong Monetary Authority (HKMA) issued its first press release on investment products linked to Lehman Brothers. In it, HKMA addressed the concerns of members of the public who had purchased investment products linked to Lehman Brothers. It also arranged for a meeting the following day, 22 September, “to facilitate communication among investors, representatives of banks that sold Lehman-related products and the trustees who are holding the collateral for the investments.” In the same press release, the public were informed that banks, at the request of HKMA, were preparing to set up dedicated telephone lines to answer questions on Lehman-Brothers-related investment products sold by them. HKMA also planned to set up its own hotline “to assist any individual investors who might have complaints in relation to the sale by banks of investment products related to Lehman Brothers.” HKMA also issued a reminder to the banks “to comply with relevant regulations and have adequate internal controls to ensure that the suitability of products for customers is properly assessed and that there is adequate disclosure of major features and risks’ and that ‘banks are also required to assure themselves that

The financial meltdown of 2008 was unprecedented in scale and severity. Many countries initiated extraordinary fiscal measures to prevent a total collapse of their financial systems. The subdued response by MAS to the plights of the Lehman investors could be seen as out of proportion for a crisis of such magnitude. Although MAS did appeal to FIs to “do the right thing”, the impasse between banks and investors over the issue of misselling is difficult to surmount. No sane FI would admit to any wrong doing just as MAS would not admit to any oversight in allowing such risky products to be sold over the counter. This is not the first time investors in Singapore were left to fend for themselves. Ten years ago, the Central Limit Order Book (CLOB) fiasco left many investors of Malaysian shares stranded and clueless after the Malaysian authority declared the trading of such shares illegal. Back in 1998, investors were looking to the Stock Exchange of Singapore (SES) for direction and leadership but nothing much came out of it. The solution to the CLOB fiasco was left to some opportunistic Malaysian party which gave a ‘Hobson’s choice’ to helpless shareholders to consider. The dichotomy of the two cities’ handling of the Lehman fallout is quite ironic. One would have thought “caveat emptor” would rule the day in a laissez-faire state like Hong Kong but HKMA surprised many with its hands-on stance to help investors and FIs resolve their dispute over the alleged mis-selling of structured financial products. Apart from a small group of ‘vulnerable’ elderly investors who got some attention and redress from the authority and FIs over the financial fallout, caveat emptor will most likely rule the day for most affected investors in Singapore. For a nanny-state, the expected intervention by the authority in this debacle was somewhat restrained. This administrative restraint, perhaps, can be traced back to 12 Oct 1998 when Deputy Prime Minister Lee Hsien Loong said in reply to a parliamentary question on the CLOB issue: “The government cannot protect investors from such risks. Investors have to keep their eyes open and judge for themselves whether the returns are adequate to justify the risks.” So are the returns adequate to justify the risks in putting one’s life savings into those failed financial products? Affected investors looking to MAS for assistance in answering this question will be sadly disappointed. Caveat emptor rules the day unless you are old and uneducated.